The ideas of local leaders who handle the day-to-day management of operations can be successfully applied by corporate leadership to the rest of the company.

The corporate mothership isn't the sole source of good ideas. Local operators can bring major improvements to the rest of the company. This is especially true with location selection - national strategy can combine with on-the-ground sense of local markets. If leadership can avoid the "not-invented-here" syndrome, with care, these practices can spread.

Let's look at an example from our consulting practice: A local manager of a national manufacturing company was preparing to open a new parts depot. This store would sell spares, accessories, and maintenance materials for its product line. He asked a simple question: Based on the locations of my customers and competitors, where is the best spot in town to reach them? We conducted a straightforward study.

A Simple Request
First, we worked with a local commercial broker to identify three clusters with strong access and available buildings. Next we viewed each cluster through three lenses: residential density, population growth, and employment density. To this we added the company's contractor customers, the institutions that use their equipment, and their competitors.

Next, we plotted 10- and 20-minute drive time "amoebas" showing how many customers they could reach from each of several possible locations. This also provided tabular data on demographics, number of customers and competitors for each location, and drive time. Together, these pointed to an area adjacent to an interstate.

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Corporate Gets Involved
Things got interesting when the local managers showed the report to regional leaders who immediately requested a plot of active customers in the region. The regional leaders asked us to generate the same maps, zooming out to consider the larger sales territory that included our starting point. The locals had done a nice job of identifying a facility, but the maps also raised the question, "What about those customers and all the other towns that also appear on this map? Are we sure the depot should even be in your city?" Our early conversation with the local leader had not mentioned that this facility would serve the region and neighboring states.

Regional leaders provided customer and competitor data from their national database. At this point, local knowledge kicked in. Though this was a national database, local leaders did not use it consistently. In some cities, "customer" included everyone who had ever bought something. In others, the data included sales levels, and were scrubbed to remove inactive customers. Likewise, the industries they served varied by region - hospitals, casinos, and schools all had varying degrees of importance. Through a series of laborious interviews with local leaders, we standardized the data set to arrive at a targeted result.

From this, we generated maps targeting potential parts facilities locations in multiple locations in the region, essentially replicating the original exercise in each city. This showed geographic distribution that was relatively even across the territory, not focused in the target city. For customers who were not near a particular city, a 60-minute radius seemed more appropriate. Ultimately, the client selected a location well east of the original market, but reaching another major market as well.

About the Author

Tim Feemster, Managing Principal, Foremost Quality Logistics

Over 35 years of experience have provided Tim Feemster, Managing Partner, Foremost Quality Logistics, with a variety of problem solving situations in real estate, transportation, logistics, and distribution. Feemster is quoted frequently in the industry press and makes over 20 presentations a year to professional organizations.
Before starting FQL Logistics, Feemster was a senior manager in three manufacturing companies, a consultant, an executive in two 3PL logistics providers, and a Practice Group leader at two real estate companies. Feemster has been responsible for transportation and warehouse operations, real estate site selection, economic development strategy consulting, strategic planning, and lean quality management.
Feemster holds an M.B.A. in Marketing from the Ross School of Business, University of Michigan in Ann Arbor, and a B.A. in Mathematics from DePauw University in Greencastle, Indiana. Feemster is an active member in the Warehouse Education and Research Council (WERC.org), where he is past president, and the Council Supply Chain Management Professionals (CSCMP.org. He is also a member of the Board of Directors for the Trade Data Exchange (TDE) Corporation.

Noah Shlaes is Managing Director of Newmark Grubb Knight Frank’s Strategic Consulting Group and brings to the table over 28 years of experience in corporate real estate strategy and operations, portfolio planning, and real estate technology.
Shlaes joined Newmark Grubb Knight Frank from Grubb & Ellis, where he started in 2004 as Managing Director of the Strategic Consulting group. From 1988 to 2002, Shlaes worked at Arthur Andersen, culminating in his role as Director of Corporate Real Estate Services. From 2002 to 2004, he was Senior Director of FPL Associates Consulting, and focused on portfolio review, due diligence, and operations strategy for real estate investment companies.
Shlaes has advised international banks, utilities, manufacturing companies, railroads, universities, and state governments on various real estate matters. With a focus on corporate real estate strategy, Shlaes has spanned a diverse client base that includes governments, universities, investors, and corporations across the globe.
Shlaes is the creator of the Grubb & Ellis proprietary Thinking Tool and Portfolio Pulse for portfolio planning, and has published articles on portfolio planning, real estate strategy, software selection, and the valuation of brownfield properties. He has also taught real estate appraisal at the graduate level and overseas, and has extensive background in real estate-related computer applications.
He has served as a guest lecturer and instructor at DePaul University’s Kellstadt GSB, Boston College, and the School of the Art Institute.
Major clients have included Alcoa, Inc.; Arden Realty, Inc.; Arthur J. Gallagher & Company; City of San Diego; Conoco Phillips; Equity Office Properties Trust; Georgia-Pacific; Hewitt Associates; Kamehameha Schools; Microsoft; The Ohio State University; Port Authority of New York and New Jersey; Roosevelt University; Union Pacific Railroad; US Postal Service; US Sprint; Waste Management; and Vornado Realty Trust.
Shlaes holds an undergraduate degree in Economics from the University of Michigan.